Fred Siegel on the future of New York City under Mayor de Blasio: A Public Sector Inc.org Q&A

Fred Siegel is a senior fellow of the Manhattan Institute’s Center for State and Local Leadership and a City Journal contributing editor. He is author of The Prince of the City: Giuliani, New York and the Genius of American Life and The Future Once Happened Here: New York, D.C., L.A. and the Fate of America’s Big Cities. Kasia Zabawa, deputy director of the Manhattan Institute’s Center for State and Local Leadership, interviewed Siegel about the future of New York City under mayor-elect Bill de Blasio, who was elected Tuesday as the city’s 109th mayor. Below is an edited transcript.

ZABAWA: Fred, last night Bill de Blasio won with a 49 percent vote margin. It was the most sweeping victory in a mayor’s race since Ed Koch won by 68 points in 1985 and one of the largest by a non-incumbent mayoral candidate. He is the first Democrat in the mayor’s office since David Dinkins. Is this shift leftward a referendum on an entire era, starting with Giuliani and ending with Bloomberg? Or are there other forces at play?

SIEGEL: Bloomberg’s decision to run for a third term left many people angry and embittered. Also Bloomberg never paid a political price for the chaos in the school system. De Blasio did a very good job of appealing to those voters, those parents in the school system, who are very upset. People forget that Bloomberg barely won in 2009 against a very weak candidate in Bill Thompson. De Blasio’s strength was that he was the only one who picked up on the depth of the anti-Bloomberg currents and he rode them.

The other thing is that the city has changed demographically — and enormously, the white ethnic populations in 1993 when Giuliani won for the first time are much diminished. Irish, Italian Catholics, and Jews are a smaller percentage of the city now than they were then and there’s simply the question of the people that have arrived since the debacle of the Dinkins years and have no sense of what Democrats had wrought in the past.

ZABAWA: Does this give de Blasio what he said was an unmistakable mandate to pursue his liberal agenda?

SIEGEL: Well there is a mandate, he’s right in a certain sense. It’s not just him. It’s the entire city government. All three citywide elected officials are connected to the Working Families Party – the leftwing group that’s tied to the public sector unions. City council will be dominated by people in the progressive caucus tied to the Working Families Party. There is a kind of mandate for something different. What this will amount to is state-sponsored mobility – guaranteed pay increases for certain categories of work.

ZABAWA: What will a de Blasio administration agenda look like when it comes to public safety, education – really, quality of life?

SIEGEL: The important thing is that people sometimes talk as if when de Blasio is elected, New York will become Detroit. No, not by a long shot. There’s an awful lot of room to be had in New York City. We’ll have a slow decline. On policing, the de Blasio approach has already received a blow when the federal circuit count overturned the ruling of Judge Scheindlin who found racial profiling. As the Manhattan Institute’s Heather Mac Donald has pointed out, there is none. So he’s going to come into office with a loss under his belt. His policies have been partially repudiated by a federal court. And then in terms of crime, I don’t think that there will be any explosion but you’ll probably see a gradual uptick in crime as police become more passive. The big reform that Giuliani and Bratton instituted in 1994 turned the police from a passive to an active force. That had an enormously positive effect. The police, given the fact that they can now be sued individually by disgruntled citizens for supposed racial profiling, are likely to be more hesitant to act and that’s what you’re going to see over time.

I don’t think he’s going to have very much effect on education outcomes. What I am worried about is school discipline. There’s a good deal of worry from people inside the school system that de Blasio’s approach may make it difficult to maintain public safety inside the schools.

What won’t change under de Blasio is the sense of the city being run on a top-bottom basis. De Blasio has no more interest in the middle class than Bloomberg did. He has an interest in the well-to-do as a source of funds to tap to provide benefits to his core constituency on the lower end of the population. But neither of them have much concern for New York’s losing its middle class population. I think people are going to be surprised to the degree of similarities than they might expect. In both cases you’ll have considerable cases of crony capitalism. The outstanding example of crony capitalism in the Bloomberg years is the building of the Barclays Center in Atlantic Yards. That was a billion dollars in subsidies from the city and the state combined and that was supported by both Bloomberg and de Blasio.

SIEGEL: Well when he had to run the Hillary Clinton campaign, he did a bad job. He was pushed aside at the end of the campaign because he had trouble making decisions. We will see what happens when he gets into office but that experience and the experience as public advocate doesn’t suggest someone with managerial skills that we can count on. People sometimes say managerial skills don’t matter, we can hire people. That’s exactly what’s at issue right now in Obamacare. The president didn’t think about implementation. What we can say with certainty is that he wasn’t on top of the process of implementation and that’s cost him dearly.

ZABAWA: Let’s talk about those union contracts. De Blasio has not been clear about how he’ll deal with labor on this issue. Retroactive pay for years without a contract are going to cost the city as much as $7 billion. New York can’t afford it so going to happen?

SIEGEL: He won’t give them the whole seven billion. He will give a piece of the back pay. De Blasio has a difficult task with union contracts but it’s not insurmountable in the short run. He can play with different accounts in the treasury to provide small retroactive raises for union members in return for small symbolic and in some cases, almost imaginary reforms. There will be a trade-off, very minor reforms for small salary increases. The problem for de Blasio will come over time as the mounting costs of pensions add up and eat into the overall city budget. Again as with policing, doom is not at the door but, over time, problems will deepen. And the big problem will come if the Federal Reserve, which has been keeping New York afloat, ever ends quantitative easing, pouring massive amounts into the money center banks which in turn end up boosting Wall Street. If Wall Street slides, New York will slide. We’re a couple of years away from that problem.

ZABAWA: What will be the role of the media in the coming years?

SIEGEL: The Times will cheer on de Blasio’s every move. They have a new champion. They will not be very critical. It will be up to the tabloids to keep watch on city government. When these things go wrong – as they are likely to – it will be up to them to sound the alarm.

ZABAWA: You have a new book coming out. Can you give us a preview?

SIEGEL: The name of the book is The Revolt Against the Masses: How Liberalism Has Undermined the Middle Class. It modestly tries to rewrite the whole history of American liberalism in 200 pages. It’s a short book, I think it’s a readable book but it tries to explain why the New Deal is not at the center of American liberalism.

ZABAWA: We look forward to reading it. Fred thanks so much for your time.